Bombardier Inc government aid announcement to come within weeks as Ottawa finishes review: source

MONTREAL – Canada’s government has finished studying a request from struggling planemaker Bombardier Inc for $1 billion in aid and it is preparing to make a comment within weeks, according to a resource with direct knowledge of the situation.

Bombardier wants the money to help finance its new CSeries passenger jet, which faces tough competition from Europe’s Airbus Group SE and the United States’ Boeing Co .

The clients are based in Quebec, which last October invested $1 billion in the CSeries, and today Bombardier and also the province want Ottawa to follow along with suit to help protect thousands of well-paid jobs.

“The research is performed,” the origin said. “The government is preparing to make a comment within weeks, not months.”

Bombardier formally requested federal assistance on Dec. 11, and the two sides continue to be referring to what form possible aid could take, the origin added.

Prime Minister Justin Trudeau told Bloomberg Television on Thursday that the CSeries would be a “fabulous” plane and cited what he explained was significant support planemakers Airbus, Boeing and Brazil’s Embraer SA caused by their respective governments.

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Pressed on the timing of a possible announcement about aid, he replied: “We’re taking our time … to ensure we’re doing the right thing in the interests from the Canadian industry and high-quality jobs” as well as respecting taxpayers.

A spokesman for Innovation Minister Navdeep Bains, that has direct responsibility for the file, said talks forwards and backwards sides were continuing.

“There has been progress in the discussions, but a decision has not been reached,” he explained.

Senior government sources say that while Ottawa is likely to help Bombardier, it dislikes the way the $1 billion Quebec deal was structured.

Quebec wants the CSeries to be spun off right into a separate entity, with Ottawa taking a one-third stake. This would take away the 100-150 seat jet program from the company’s books and boost its short-term financial results.

The first CSeries jet will enter service in 2016 after many years of delays. Bombardier has booked just 243 firm orders. It currently controls 50.5 per cent of the CSeries, while Quebec has a 49.5 percent stake.

Under Quebec’s proposal, if Ottawa matches the province’s $1 billion contribution, both governments would own one-third stakes within the CSeries. Bombardier might have the remaining.

? Thomson Reuters 2016